FHA Loans: Requirements, Rates, and Down Payments (2026)
By Wealthvieu · Updated
FHA loans are government-backed mortgages designed for borrowers with lower credit scores and smaller down payments. They’re the most popular mortgage for first-time home buyers. Here’s everything you need to know.
Table of Contents
FHA Loan Requirements at a Glance
Requirement
FHA Minimum
Typical Lender Minimum
Credit score (3.5% down)
580
620
Credit score (10% down)
500
580
Down payment
3.5% (580+ score) or 10% (500-579)
Same
Debt-to-income ratio (front-end)
31%
31%
Debt-to-income ratio (back-end)
43%
43-50% with compensating factors
Employment history
2 years steady employment
Same
Property type
Primary residence only
Same
Occupancy
Must move in within 60 days
Same
Upfront mortgage insurance (UFMIP)
1.75% of loan amount
Same
Annual mortgage insurance (MIP)
0.55% of loan amount
Same
2026 FHA Loan Limits
Area Type
Single-Family
Duplex
Triplex
Fourplex
Low-cost area (floor)
$498,257
$637,950
$771,125
$958,350
High-cost area (ceiling)
$1,149,825
$1,472,250
$1,779,525
$2,211,600
FHA Limits for Major Metro Areas (2026)
Metro Area
FHA Limit (Single-Family)
New York City, NY
$1,149,825
Los Angeles, CA
$1,149,825
San Francisco, CA
$1,149,825
Seattle, WA
$977,500
Boston, MA
$862,500
Denver, CO
$816,750
Washington, DC
$1,149,825
Miami, FL
$621,000
Chicago, IL
$498,257
Dallas, TX
$498,257
Atlanta, GA
$498,257
Phoenix, AZ
$498,257
Houston, TX
$498,257
FHA Down Payment Details
Down Payment by Home Price
Home Price
3.5% Down
10% Down
Cash Needed (3.5% + Closing Costs)
$200,000
$7,000
$20,000
$13,000-$17,000
$250,000
$8,750
$25,000
$16,250-$21,250
$300,000
$10,500
$30,000
$19,500-$25,500
$350,000
$12,250
$35,000
$22,750-$29,750
$400,000
$14,000
$40,000
$26,000-$34,000
$500,000
$17,500
$50,000
$32,500-$42,500
Acceptable Down Payment Sources
Source
Allowed?
Documentation Needed
Personal savings
Yes
2 months bank statements
Gift from family
Yes
Gift letter, donor’s bank statement
Down payment assistance program
Yes
Program documentation
Employer assistance
Yes
Employer letter
Government grants
Yes
Grant documentation
Borrowed funds (secured)
Yes
Proof of collateral
Borrowed funds (unsecured)
No
N/A
Cash with no paper trail
No
All funds must be sourced
FHA Mortgage Insurance Costs
Upfront Mortgage Insurance Premium (UFMIP)
Loan Amount
UFMIP (1.75%)
If Financed Into Loan
$200,000
$3,500
New loan: $203,500
$250,000
$4,375
New loan: $254,375
$300,000
$5,250
New loan: $305,250
$400,000
$7,000
New loan: $407,000
$500,000
$8,750
New loan: $508,750
Annual MIP (Monthly Cost)
Loan Amount
Annual MIP (0.55%)
Monthly MIP Cost
$200,000
$1,100
$92
$250,000
$1,375
$115
$300,000
$1,650
$138
$400,000
$2,200
$183
$500,000
$2,750
$229
How Long MIP Lasts
Down Payment
MIP Duration
Less than 10%
Life of the loan
10% or more
11 years
FHA vs. Conventional Loans
Feature
FHA Loan
Conventional Loan
Minimum credit score
580 (3.5% down) or 500 (10% down)
620 (typically 640+)
Minimum down payment
3.5%
3% (some programs) or 5%
Mortgage insurance
Required: UFMIP + annual MIP
PMI required under 20% down
MI cancellation
Only with 10%+ down (after 11 years) or refinance
Auto-cancels at 78% LTV
Loan limits
$498,257-$1,149,825
$766,550-$1,149,825 (conforming)
Property standards
Strict FHA appraisal requirements
Standard appraisal
DTI limit
43% (up to 50% with compensating factors)
43-50%
Interest rates
Typically 0.25-0.5% lower than conventional
Varies by credit and LTV
Seller concessions
Up to 6% of sale price
3-9% depending on down payment
Assumable?
Yes
No
Monthly Payment Comparison: $300,000 Home
Cost
FHA (3.5% Down)
Conventional (5% Down)
Conventional (20% Down)
Down payment
$10,500
$15,000
$60,000
Loan amount
$289,500 + UFMIP = $294,568
$285,000
$240,000
Interest rate
6.5%
6.75%
6.75%
Principal + interest
$1,862
$1,848
$1,556
Mortgage insurance
$138/month (MIP)
$119/month (PMI)
$0
Total P&I + MI
$2,000
$1,967
$1,556
MI cancellation
Never (unless refinance)
At 78% LTV (~8 years)
N/A
FHA Appraisal Requirements
FHA appraisals are stricter than conventional—the property must meet HUD’s Minimum Property Requirements:
Requirement
What the Appraiser Checks
Structural integrity
Foundation, roof, walls in good condition
Safety hazards
No exposed wiring, lead paint (pre-1978 homes), asbestos
Adequate heating
Functional heating system
Water and sewage
Working plumbing and no leaks
Roof condition
At least 2-3 years of remaining life
Crawl space access
Must be accessible
Handrails
Required on stairs with 3+ steps
Chipping/peeling paint
Must be scraped and repainted (pre-1978 homes)
Water damage
No active leaks or standing water
Common FHA Appraisal Issues
Issue
How to Address
Peeling paint (pre-1978 home)
Seller must scrape and repaint
Missing handrails
Seller must install before closing
Broken windows
Must be repaired
Non-functional appliances
Must be repaired or replaced
Roof with < 2 years life
May require roof replacement or escrow holdback
Foundation cracks
Structural engineer assessment may be needed
Who Should Get an FHA Loan
FHA Is Best For
Why
First-time buyers with little savings
3.5% down is among the lowest available
Buyers with credit scores 580-679
Better rates than conventional at this score range
